tv Bloomberg Markets The Trump Economy Bloomberg August 8, 2017 1:00pm-2:00pm EDT
controversial copper must've changed the tax code, a hybrid plan that would makes permanent and temporary tax cuts. sometime in late september or , the u.s. needs t to increase its nearly $20 trillion debt limit. look at congress and wall street zaidi. anxiety. jeffrey gunn like shares his concern about where the markets are headed and on the political risk here in the united states. ♪ david: we will start this afternoon with the debate over the debt ceiling and what might happen if congress does not raise that limit and the u.s. finds itself in a position where it cannot pay its bills. treasury secretary steve mnuchin told lawmakers this in march, "i respectfully urge congress to retain the full faith of the united states by increasing the
statutory debt limit as soon as possible." a bipartisan policy center in washington released its statement, "based on bbc's projections, the debt limit would need to be raised suspended by the end of september to ensure the federal government does not fall on obligations." joining us now is steve bell and a former staffer from the budget committee as well. great to see you again. walk us through this x date. it is a window through september and october. steve: every day our team goes through on a day-to-day basis and says -- pardon me -- what has to be paid today by the treasury? and we make an estimate. we compared it to the last 45 years and then we take a look at one of the statutory requiremd payments by the treasury. that is one reason we are all surrounding here in our shop the date of september 29 two about the first week in october.
on october 2, the beginning of the week. we have an $80 billion plus transfer from the treasury over to the veterans retirement system. that is mandatory. on october 3, we have a large payment of $22 billion. if they're looking at the first week of october and think that they can start doing negotiating then, they are going to be way behind the curve. that is why we say start in september. david: you have seen this movie many times before and i wonder what market reaction has been like leading up to these dates in the past. what do you see in the treasury markets? steve: in 2011, we had a significant movement. one cost about $19 billion of american taxpayer dollars because the short end of the curve white in the little bit -- widened a little bit. number 2 -- there were companies preparing the possibility of a
default of one or two days and 20-30,ending literally and in one case $200 million preparing for that eventuality. it is not costless at all. it takes a bite out of banks and other financial institutions. david: we had a number of conversations with folks who are tax experts on the show to talk about the yulia already of this moment -- peculiarity of this moment. you highlight this in your recent report as well. revenues maybe less than what the treasury department expects because of that uncertainty. mentre seeing postpone of capital gains by some americans. a lot of people anticipated by this time that the trump administration and congress would have some real differen definite tax bill thatt past, but a lot further along the now. a lot of people said let's hold off and see what happens after tax reform.
most people expected it to happen before the end of the year. now it's clearly in my view not going to be finished by the end of the year. happy talk notwithstanding. we want to encourage people to think things are upbeat, but the truth is they have about 17 working days when they come back from this august recess. and they have a budget resolution. if you don't have that, you can't get filibuster approved kind of tax bill. they have to deal with all the spending bills for the next year. they have to deal with the debt limit. the truth is this -- they are going to be running out of time. people now may regret having held off on paying those capital gains taxes. david: looking at the data, you also listen to the rhetoric in washington as well. are we starting to hear this administration speak and a more unified way on what its plan is when it comes to raising the debt limit? are you getting mick mulvaney and steve mnuchin on the stand same page?
steve: they are now, at least publicly. mr. mnuchin was all along saying what the president was saying, which is i want a clean that fill us in as possible. mulvaney, who comes out of the house, has always been one who voted against extending or increasing the debt limit. he is one of those who in the past said, no, let's use the debt limit as a legislative vehicle for some sort of grand bargain that will get the deficit down. he now has been told that the of ministrations position is a clean debt bill as soon as possible. we know that won't happen, but it is something that every treasury secretary has wanted. david: steve, great to speak with you as always. steve bell, dec director of the bipartisan policy center. nobody does this like the bipartisan policy center does a in and day out, looking at where that date is. let's get a check of where the market stand.
julie hyman is here with the latest. julie: all three averages higher, although off the highs of the session. the dow and s&p 500 still had records. the nasdaq gaining the most of the three major averages. -watching the vix because jeff gundlach talked earlier today about having concerns about the sustainability of the rally. he highlighted the vix in particular, saying it could go from 20 to 10 now. it is not a bear call on the s&p 500 some much as able call on the vix. we saw the vix take a leg up at that time and that is one stocks started to come down from the high. the vix is still very suppressed historical standards. it is only barely above 10. it was below 10 earlier in the session. it does tend to perk up seasonally around the later part of august. it is interesting that we saw that movement on his comments in what is admittedly a thinly traded market as well. we are also watching what is
going on with rates today. as we saw earlier, numbers on the jobs market -- the job earnings jolt status come in at the highest ever. as a record high for job openings. we saw the 10 year yield clerk up on that -- perk up on that. we saw more uniform strengthened banks, but bank of america is lower. jpmorgan wells fargo getting a boost. the banks collectively are at their highest since early march. we are also watching today outside of the u.s., the south african rand, it is falling versus the dollar. the dollar rising by 1.3%. that take up that we saw was after the south african president, jacob zuma, survived a no-confidence vote in parliament. that sets up more turmoil to come between he and the other government officials in south africa. sort of a government crisis started when he let go of the
finance minister in that country. now there has been a lot of turmoil over whether he was going to keep his position. rainfall on the results of this though. david: julie hyman with that update on that no-confidence vote in south africa. coming up, republicans said to be considering a compromise on tax reform that would include permanent and temporary measures. what it be the key for unlocking progress for majority leader mitch mcconnell and other members of that group that's come to be known as the big six? this is bloomberg. ♪
let's check in on the bloomberg first word news this afternoon. mark barton has more. mark: secretary of state next tillerson flew to malaysia today for his last scheduled stop of the south east asia to tour. he met at an airport in kuala lumpur. he met in malaysia after stop in thailand where he urged officials to maintain pressure on north korea. thailand and malaysia had maintained ties with china. making additional information for money spent by the federal government at trump for profit properties. in a letter sent to cabinet secretaries and apartments across the country, lawmakers one document about any payment the departments made to any trump organization or business in which the trump organization has an ownership stake handed over by august 25. u.s. backed military is waiting for in assault
against militants near the border with syria. it will involve cooperation with the militant group has below and the other army on the other side of the border. the lebanese army says they are not coordinated with the syrian president. more americans are dying younger and the trend could have a grim upside -- savings for corporations. the age-adjusted shares of americans dying rose for the first time in's 1999. at least a dozen large company's over the past two years say they have been reducing estimates for how much they could oh retirees. that is according to analysis bloomberg performed on company filings from verizon to general motors. global news 20 for hours a day powered by more than 2700 journalists and analysts in over 120 countries, i mark richt and. am mark crumpton. this is bloomberg. david: let's turn the tax reform
now, something lawmakers will turn to after they returned from recess. republicans are talking about mixing permanent changes to the tax code along with tempora changes for individual's of businesses. steve mnuchin said "permanent is better than temporary and temporary is better than nothing." --ning us now is an adjutant and that adjutant. here?ould be temporary what are republicans considering if? here? anna: the had a whole list of things that they would like to do to the u.s. tax code to make it simple, lower rates, condensed the brackets for individuals. they are trying to figure out which of those levers can be permanent and which need to expire after 10 years in order to have a plan that is revenue neutral.
for the people i've been speaking with about this plan who are in touch with those participating in negotiations, it looks like the individual rates could expire like the book bush tax cuts of 2001 . corporations and businesses make decisions and decades, so they need to know what their tax rate is more than 10 years out in the future. david: let me ask you about the way that republicans are responding to this proposal here to do a hybrid plan as you describe it. you have a letter republicans who ran on full-scale total tax reform. is a sign here that republicans are beginning to edge away from r reform. -- away from capital r reform. anna: house speaker paul ryan also speaks of the biggest tax reform proposal in a generation. tohink they are beginning have to recommend what is possible and what is in the constraints of the reconciliation process that they're using to avoid have to
seek democratic support for in order to get revenue neutral, they cannot add to the federal deficit within this ten-year budget window. they need to figure out full and immediate expensing and order to simple by the tax code. they probably will not be able to do that on a permanent basis. maybe only three years if at all. david: we got a joint statement from the white house and the leadership of the house in the senate a couple days back. the border adjustment tax off the table. how radical is that change now that it is off the table? anna: i think that is something we were expected for a long time. the board adjustment tax was very controversial. it was an academically elegant solution to switch the tax code to a territorial system and get more than $1 trillion revenue over the next decade. with that off the table, they have to figure out how they're
going to make other changes to the u.s. tax code to avoid profit-sharing and profit shifting overseas and corporations moving abroad, and also where to get the revenue from. they are looking other options proposed in the past or different ways that they can take elements of that plan theout running up against very fierce opposition that we saw against the border adjustment proposal. david: lawmakers are out of town and members of their staff are still on capitol hill. what are they saying to you about the timetable for all this and the prospects of getting this done when lawmakers get back to town in the fall? anna: it was interesting in reporting the story that we heard that even with lawmakers out of town, staffers are here and they're working on this. there are rounding out the details after we had that united statement of principles the last week of july. everyone i spoke with on capitol hill is like, it is so early. we don't have definite answers to those questions yet. they are still working out these details. there is still a lot left to be decided. and they are going to have to
really move fast when they get back in september and october and november if they are going to get this done this year. david: that is anna edgerton joining me today. let's get more insight on tax reform and why it's put in for republicans to get new legislation this year. joining us now is scott hodge, who helped design component of the tax for america. scott, great to have you with us. annawe ask you about what was describing, this hybrid plan da bandied about on capitol hill. is it that republicans are facing reality and that is the only way forward in order to permit temporary fixes as well? scott: a lot of the retaliation is determined by the reconciliation rules. one of the preventions is that
you're not allowed to increase the deficit beyond the 10 year budget window that they are living under. that really guides what they can do within this budget process. so what they're trying to balance is a few different things. one is to try to get as much economic growth out of this package as possible. deliver as much middle class tax relief as possible, but do that in a way that does not increase the deficit that only within this first 10 years but in the 10 years beyond. those are a lot of needles the bread all at once. it's a big challenge to get from here to there because they have to come up with the revenues to offset any of the tax cuts that they do. wanted toy they sunset somebody the tax cuts like individual tax cuts, but keep the ones like the corporate rate cut and full expensing permanent because those are the ones that drive the most economic growth. david: how much does the rhetoric here not match the reality? it's going back to the 1980's
when we had that huge reform that involved both democrats and republicans. we are just been through this -- republicans trying to push something through congress without the help of democrats. how essential is it to have democrats at the table when it comes to trying to get large tax reform? scott: certainly that would be terrific, but i don't think it's possible. from what i'm hearing, most democrats won't vote for a bill that will give donald trump of victory. politics is really playing a huge role here unlike what it did in 1986. republicans are really going at it alone, which gives them both the responsibility but also the burden of coming up with this plan in a way that is both fiscally responsible but also delivers the most economic growth to help the most amount of people. david: what do you make of who's leading this effort, the so-called big six? you have steve mnuchin, gary cohn, mitch mcconnell, or in orrin hatch, paul ryan.
they are all working on this and hammering about. how is this compared to health care reform? scott: it's a mix of interesting people. paul ryan and kevin brady have been at this along time. the have years of work under their belt and designing tax reform plans. steve mnuchin and gary cohn are trying to catch up. both come with her wall street prospectus that they do not have a big tax background. mitch mcconnell is more of a technician here. his job is to get something over the goal line. he is probably willing to be a lot more flexible rather than ideological. it's an interesting mix of people to put together a tax reform plan and get it from start to finish. david: what have we learned from the way that the george w. bush tax cuts were implemented and then renewed? what does that teach us about how this process might unfold? scott: there again was a tax cut design really around the budget rules.
they had a look at the heart of fast and say, if this increases the deficit beyond 10 years, we are going to have to sunset this. they were unwilling to do the kind of all sets -- offsets to make this budget neutral by closing loopholes, eliminating things like the state and local tax reduction, or even more controversial things like the border adjustment that was then proposed but then clear dead. -- declared dead. they're going to make hard choices either way. they will have to find offsets -- that goesainst against special interests in order to get the good stuff you want. most people can agree on the desert, but no one can agree on the vegetables. there's a lot of vegetables to be eaten in tax reform before you get to the desert. desert?hat constitutes where you see the most agreement among members of republican congress? scott: where you get the most economic growth is.
think, cutting the corporate tax rate, moving to a territorial system is critical for improving the competitiveness of u.s. companies and the economy overall. those three things have to go together as a package. individual tax cuts are more politically popular but due to the least amount of economic growth. you have to balance all these things into a package that can pass politically but also get you as much economically. david: scott hobbs, think of a much, joining me from washington, d.c. more insight on this process friday. we will talk with one of the members i mentioned -- congressman kevin brady. he will join me on friday at 1:30 p.m. new york time right here on bloomberg television. don't miss our conversation with disney ceo bob iger. that will be 5:30 p.m. eastern time on "bloomberg technology." you will want to check that out. this is bloomberg. ♪
♪ david: this is "bloomberg markets: the trump economy." i'm david gura. let's do a quick check of the date of this tuesday afternoon. looking at the dow jones industrial average of about 20 points at 22,128. that's after hitting the 22,000 mark last week. up and the nasdaq up. gold edging down a little bit this afternoon. continuing to keep a watch on oil as opec and on opec producers meet knobby dobby later this week. nymex crude right now at $49.17 a barrel. the two yield unchanged at 1.35%. the 10 year yield at 2.28%.
continuing to watch the rand after that no-confidence vote in south africa. that zuma surviving no-confidence vote. but next, with u.s. stocks trading at all-time highs, is there a danger that the trump trade will turn south? we will look at that with jeffrey gundlach. p has joined the chorus of major investors concerned about pricing markets. we stopped about that yesterday with steve ratner. he expressed similar concern about where the market is today. is coming up right here on bloomberg. ♪
jacob zuma has survived a no-confidence vote in parliament in the most serious attempt to unseat him after months of growing anger and a sinking economy. on monday the speaker of parliament made the decision to allow the secret vote. the african national congress is expected to replace them as party leader. he us arrived six previous to remove him. more than 180,000 police have been deployed across the country. the coalition has accused the government of plotting to rig the vote. north korea has reportedly produced a militarized nuclear -- miniaturized nuclear warhead
that can fit inside its missiles. intelligence officials confirmed the rogue nation has crossed a key threshold to becoming a nuclear power. the official estimate for the number of bombs in north korea's arsenal to at least 60. coming up later this hour we will discuss the u.s. sanctions against north korea with michael mcdonagh of bloomberg intelligence. foreign ministers from 14 nations met in peru to discuss original response to venezuela's growing political crisis. that's as the president's new all-powerful constitutional assembly forges ahead with a crackdown on political and judicial opponents. the president has been vocal in rejecting the assembly that the region has had trouble agreeing on collective actions. global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg.
david: yesterday i talked with steve ratner and i asked him what he thinks about what has been called the trump trade with u.s. stocks now trading at all-time highs. >> by any measure the markets are frothy. alan greenspan was talking about markets which are equally if not more frothy than the equity markets and it's scary. as warren buffett also likes to say market timing is kind of for full's. we are not very good at it. we just try to be in safe places with safe pairs of hands. investors concerned about a pricing market. as warren buffett also likes to in an interview with erik of schatzker, he said it's time to gradually move towards the exits. he is bracing for more market turbulence. joining us now for more insight is peggy collins.
to's start with what he had say about political risk. this is something eric asked him about. one quote was, i don't see the big drop unless there is something out of left field. i think you're supposed to be gradualist italy moving towards the exits. he doesn't see tax cuts coming. he doesn't see the big infrastructure buildout a lot of people were hoping for when trump won. he also doesn't see it taking down the market. he said investor sentiment turning or frustration growing on the fact that we haven't seen a lot get done soin an intervied create a little bit of a headwind for the market. not something that could bring down the markets in the next six months. look atif you really the economic data that's holding up the markets in terms of unemployment numbers, consumer
confidence, none of those indicators are showing we might have a recession over the next six months. he's expecting more volatility. he told eric his highest conviction trade is going up. reading through his peace come my sense was he got to do went to hold them, know when to fund them. wednesday appropriate time to leave? it's time to gradually move towards the exits. you don't have a lot of to lose by starting to trim back. they have been starting to reduce their risk somewhat because we have seen such a big bump and valuations are so high that even if you trim back some you are still probably going to be way ahead the benchmark or certainly in the bond world. that's what they've been doing gradually over time and what he thinks is really the best move for investors right now. david: there's this ongoing
debate about scale and size. where does jeffrey good luck fall in that debate? that's an interesting point he brought up in the interview yesterday. he says he doesn't want to be a manager its managing 500 billion, let alone 200 billion. some of that is because he thinks it's easier to outperform if you have less money because you can be more opportunistic. you can take advantage of opportunities in the market. the bigger you get, the more offices you need around the world. the more infrastructure you need as a company. that's not something he's interested in right now. he did put a cap number on the firm. he wanted to swing in the area and not get much bigger than that. talked about the ongoing fee structure. maybe it's a good thing for a
fee to be prohibitive. keeping things besides he wants them to be. >> he said he knows his welltors know the company and they are looking for outperformance and he thinks he can deliver that to them. their fees may be above average he thinks they can deliver the performance to stand by that. it is really interesting because both the scale factor and the fee factor is what we are seeing drive competition on the passive side. you're seeing firms like blackrock, vanguard that manage trillions. and think the way they are going to win is to build scale. i could sense that eric was pressing him on what's the catalyst going to be for things to change. if you have any indication of what could cause markets to turn. >> he talked about geopolitical events. we never know what could happen geopolitically and you could see
a big drop. right now over the next six months through the end of the year he didn't see a real big in terms the markets of a big drop. peggy collins. coming up, tensions at a fever pitch with north korea. we will have the latest on that and the relationship between north korea and china, next. this is bloomberg. ♪
markets: the trump economy. focusing on a notable stock you need to watch this hour. tenet healthcare. down 11%. the biggest drop since february and the lowest level this year after that company reported earnings that missed expectations. renick joins me now. >> there's one thing you don't want to do as a company on earnings day. not only missed the earnings but also make a pretty serious cut. it's all about the guidance with a earnings because generally any company it's about the forward expectations. they lowered their fiscal year guidance for sales and earnings. a pretty substantial drop. obviously the market doesn't like that. it's moving not just itself but some of its peers. red acrossa lot of the board.
hca health care already had their troubles a couple weeks back. some ofto see where those numbers are going to land. all of those companies are down not to mention weakness for suppliers. trying to augment their acute health care business with more business from ambulatory care. this is the bloomberg intelligence take that was looking at how the business could potential expand their margins. bottom line is that quite literally in this case as the top line gets smaller those margins are going to be harder to come by. investors are hoping to see expansion. it doesn't look like it's going to happen right now. david: oliver renick with our stock of the hour. the washington post reported that north korea is now able to make miniaturized nuclear weapons that can fit ballistic missiles. that is a key step for north korea in becoming a fully fledged nuclear power. ise with some analysis
michael mcdonough. global director of economic research and chief economist at bloomberg intelligence. we hear all of this rhetoric from the president in particular about the need for china to do more. how has china done? what kind of muscle hasn't been able to help us flex? >> 90% of north korea's exports are consumed by china. one of the biggest commodities is cold. -- coal. it looks like at least officially they are doing quite a bit already on this. david: we had this latest round from the united nations to the tune of about $1 billion. like au.s. that sounds rather insignificant figure. how big a deal is that for the north korean economy? north korea's total exports are $3 billion. they're saying this will take
about $1 billion off the table. chinese coal imports alone are about $1 billion. i think the impact could be bigger. this is a very big deal for a regime that doesn't have a lot of sources for hard currency. people are supporters of the north korean leadership because they're pretty well taken care of. if he suddenly don't have capital to help take care of these people he you could have your own domestic situation. it's also rather costly to have a nuclear missile program, i would imagine. is rather significant. david: what is the trade relationship between china and north korea? how important is china to north korea? >> it's 90%. it's almost everything. coal is $1 billion. 20 start adding in other commodities that we can track exports between the countries, 50% of all the exports going to
china are included in these sanctions. that doesn't include all of the commodities because we don't have data on all of them. the latest sanctions may embolden the country's bellicose leadership to further risk destabilizing the region. how do you gauge the efficacy of sanctions. you bring up the counterpoint they could have the opposite effect we would like. >> the reaction to the sanctions was not very nice to the allies. china is an interesting predicament right now. you have always had the unknown of north korea. china also has the unknown of the u.s. because they don't know how the trump administration could react to north korea. china doesn't want to make north korea to angry because then they have a nuclear armed neighbor. at the same time they can't be too soft because trump might decide to go it alone which
could increase the chance of military conflict in the region. it's a bad place for china to be at the moment. they are it looks like officially siding with the u.s. david: to what degree is this weighing on markets? is this something that is worrying investors? when north korea first started testing missiles and nuclear bombs you would see a market reaction. move in thee a treasuries. we are starting to see now is the market again starting to respond to some of these tests. especially if you see a nuclear test you will start seeing some market movement. what could determine that is how president trump or china response to that. great to speak with you,
thank you very much. korea, nancyorth soderberg is the former deputy national advisor under president clinton. former u.s. ambassador to the united nations. she is currently running for a house seat in florida sixth consecutive -- congressional district. change the vote over the weekend represented? what that tells us about the direction of the diplomatic options. it's a very big deal to get china and russia to go along with the united states is a real diplomatic victory for nikki haley and the entire trump administration. it's hard to get china to squeeze north korea the way these sanctions do. the chinese don't want north korea to collapse because millions of refugees would flood in.
they are walking this tight rope. these are tough sanctions. the toughest ever. the question is what now. will it really have an impact on the president of north korea, a man who cares nothing about his people. it is going to squeeze in. there's no question about it. hopefully it will get him back to the negotiating table and pulled back from the brink of these miniaturized nuclear weapons on top of intercontinental ballistic missiles. it could potentially reach the united states. i commend the yuan for doing this. sit downup to china to with the regime and say, enough is enough. let's pull back. this is not a crisis that's going to end anytime soon. david: how far from the negotiating room is north korea at this point?
it seems like they are farther than ever they have been to that negotiating table. i think that's right. they have a mission at the united nations. people talk to them. everybody knows the ambassador from north korea doesn't have a lot of legroom. everything has to go back to the capital. by one man. president kim and only he is going to make these decisions. right now he is hell-bent jumping off the cliff and we will see if we can pull him back from the precipice. we are keeping military options on the table. a diplomatic solution is the best of very difficult options. this has been the worst problem in the president's inbox starting from the first president books through -- bush through president clinton. the north koreans use nuclear weapons as their only currency to try and get concessions and
then they cheat. it's a pattern that has gone on for 40 years through three camden.ons of my guess is it will be back-and-forth for some time. david: let me ask about the leadership in south korea. there's a new president. on gettingy keen back to the negotiating table. what kind of leadership role do you expect him to play going forward. >> it's a one-man show. he took office unexpectedly at age 28. rapidly murdered some members of his family in order to consolidate his power. a very powerful uncle, half brother. he's the only one in charge. it's up to him now. this is aalyst said, regime that makes a lot of money off of the system. if there is fallout within the inner circle things could happen internally.
a one-man show and has been. unless you either remove him which is not on the table or get him to negotiate, you are into one crisis after another. the region has been negotiating. they get north korea back to bed and pulled back from the brink. if they're willing to sit down in those six party talks, that's a sign of relief for everyone. if they refuse to do that we are in for a crisis. your timenk you for this afternoon, nancy soderberg. former u.s. ambassador to the united nations. present --trump to temporarily put the brakes on china's intellectual property violations. next, this is bloomberg. ♪
the president plans to wait at least a week before the administration moves forward with a trade investigation of china on intellectual property violations. for with what this means u.s. china relations is team leader for u.s. economic policy. how direct a line can you draw between the sanctions and this conversation over whether or not to start this new investigation into trade? hearing is from this administration source that president trump decided to delay by a week or longer an investigation into perceived ip violations. why would trump do this? apparently he is wanting to reward or urged china for cooperation on north korea's nuclear threat. this is an imminent threat i would guess.
what's interesting is this is the first time we have seen trump do this. dangle a carrot for china. campaign hee pledged to label china a currency manipulator and we saw in april he backed down from that. he said he got cooperation from president. economic policy is being tied to foreign policy. david: how radical change is that? that notion of using trade as a weapon. is this something we haven't seen in a while in the u.s.? it doesn'the issues address and that previous administrations have done is that there are some big issues to deal with with china. thee's overcapacity in steel industry. there's market access that american companies would love to
have into chinese markets. there is an issue of ip violations whether it's trade theft or other things that happen slowly. you have to work on these issues. andhave to have discussions make some progress. something reward is at least publicly we don't see very often. there was that dialogue in washington just a few weeks ago. and economic dialogue in which we didn't get a plan forward for more talks, more conversations about this. has conversations about the investigations colored that relationship as far? what we are hearing outwardly from china is very much a message of cooperation. they want to work with the u.s. and on the other side sometimes we hear both messages from
president trump. either we need to punish china or we are working together. we get along great. hard to know how each country is feeling about each other. we know those talks broke down. typically there is a press release at the end of these kind of talks. i guess a sign of those breaking down could send a signal that things aren't as rosy as we might be led to believe. onid: coming up later today bloomberg technology, by biber -- bob iger joins us live. that's at 5:30. this is bloomberg. ♪ who knew that phones would start doing everything?
welcome to bloomberg markets. scarlet: we are live in bloomberg world headquarters. here at the top stories we are covering around the world. just good luck he's wary of a pricey market. we will see if other investors agree with him. one stock on investors minds, disney. it will be reporting after the bell. we will bring you the numbers telling the stories. and something we haven't heard in a while, a bright spot for retail. and ralph lauren pushing strong earnings as they find a way to get consumers to pay full price. in about twoclose hours time. let's get a check on the modest moves we are seeing in equities. it has